Peloton insiders bought almost $500 million in inventory earlier than its massive drop

peloton Executives and insiders sold nearly $500 million worth of their stock ahead of the big drop, according to filings with the Securities and Exchange Commission.

Peloton stock is down more than 80% from its highs over the last year, hitting a 52-week low of $29.11 on Tuesday. But the company’s CEO and other executives sold millions of shares at prices in excess of $100 a share in the months leading up to the big falls.

Company executives and insiders sold their stock valued at $496 million in 2021, according to SmartInsider, citing SEC filings. Virtually all sales were part of 10b5-1 plans or pre-planned sales programs. It’s unclear how many of the sales also involved option exercises or tax sales related to options.

The big sell-off started when the stock started to climb above $80 per share in the fall of 2020 and gained momentum in 2021 when the stock held above $100, filings show.

The company did not respond to requests for comment.

Peloton shares soared as sales and subscribers increased throughout the year first year of the corona pandemic. Consumers flocked to the product when they were looking for ways to work up a sweat without a gym membership. To meet the strong demand, Peloton invested in his business, to scurry ramp up productiong and Accelerate order fulfillment. But when the Covid vaccines rolled out, the company saw weaker demand and its shares started falling.

John Foley, the company’s CEO and co-founder, sold $119 million worth of shares as of November 2020, according to SmartInsider. Most of his sales were $110 a share or more. The sales were part of a pre-agreed 10b5-1 plan to “sell a limited number of the company’s stock for personal finance management purposes,” according to an SEC filing.

Although the plan called for the sale of up to 2.4 million shares by October 2022, Foley informed the board that he had ended the sale plan on August 30, 2021 after selling a total of 1 million shares. No reason was given for the termination, but on November 4, 2021, The company lowered its sales forecast and stocks plummeted.

The stock sales accounted for about 16% of Foley’s total stake in the company, excluding options. Including options, the sale represented about 5% of its holdings, according to SmartInsider.

Many top executives have also cashed out some of their holdings through timely sales. William Lynch, the company’s president, sold more than $105 million in stock last year, with $72 million sold in February at an average price of $144.95.

John Foley, co-founder and chief executive officer of Peloton Interactive Inc., center, speaks as Hisao Kushi, co-founder and chief legal officer of Peloton Interactive Inc., from left, Tom Cortese, co-founder and chief operating officer of Peloton Interactive Inc., Yony Feng, co-founder and chief technology officer of Peloton Interactive Inc., and Graham Stanton, co-founder of Peloton Interactive Inc., listen during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., Thursday, May 26. Sept 2019

Michael Nagel | Bloomberg | Getty Images

Hisao Kushi, co-founder and chief legal and culture officer, sold more than $90 million of its shares — most at prices in excess of $110 per share. Other top sellers included the company’s chief product officer, Tom Cortese, who sold more than $60 million of its stock, and chief operating officer Mariana Garavaglia, who posted more than $25 million in sales.

Members of the board of directors have also cashed out their holdings, including Karen Boone, who sold more than $20 million worth of shares at prices in excess of $140 per share last February, according to documents.

Of course, Peloton insiders weren’t the only ones selling the stock during last year’s runup. With large stock sales by prominent executives such as jeff bezos and Elon Musk, total insider sale achieved a record $170 billion last year, up from $94 billion in 2020, according to SmartInsider. Historically, executives and insiders sell during or near the highs of their stock prices.

“One of the best accepted facts from decades of insider trading research is that corporate insiders buy near bottoms and sell near tops,” said Daniel Taylor, associate professor at the Wharton School.

At the moment, Peloton is flirting with new lows. The stock came very close to falling below it $29 per share IPO price, after CNBC reported that the company had hired McKinsey to review its cost structure, an effort that could result in job cuts and store closures. Peloton is also effectively increasing product prices later this month when that happens begins charging for shipping and installation.

Peloton is about to tack on a whole lot of {dollars} in charges to its Bike and treadmill, citing inflation

Peloton Interactive Inc.’s stationary bikes are on display at the company’s Madison Avenue showroom on Wednesday, December 18, 2019 in New York, USA.

jeenah moon | Bloomberg | Getty Images

peloton is on the verge of effectively charging customers more for its original Bike and Tread products, citing rising inflation and increased supply chain costs.

Beginning Jan. 31, the company will ask customers to pay an additional $250 for delivery and setup of their bike and an additional $350 for their Tread, according to a banner on its website. This will increase the cost of these products to $1,745 and $2,845 respectively.

Previously, Peloton said that the $250 and $350 shipping and assembly fees are included in the overall Bike and Tread price.

The price of Peloton’s newer $2,495 Bike+ product will not change, according to its website.

In the UK, Germany and Australia, Peloton has similar news on its website that costs will increase from January 31st.

During a recent company executive meeting, Dara Treseder, Peloton’s chief marketing and communications officer, said the changes were due to rising inflation and higher supply chain spending.

“Right now people are raising prices. Ikea just raised prices. We want to go in the middle,” Treseder said, according to a recording of the meeting available to CNBC.

She added that the company doesn’t want to be perceived as “switching and baiting” with customers.

A Peloton spokeswoman told CNBC in an emailed statement, “Like many other companies, Peloton is impacted by global economic and supply chain challenges that affect majority, if not all, companies worldwide.”

“Despite these increases, we believe we still offer the best value for money in connected fitness and provide consumers with various financing options that bring Peloton to a broad audience,” said the spokeswoman.

The $39.99 monthly subscription fee that connected fitness users pay for on-demand content remains the same.

In August Peloton had lower the price of the cheaper bike product by about 20% to $1,495 in hopes of appealing to more consumers with a cheaper option.

After seeing increased demand from consumers looking for at-home exercise equipment in 2020, Peloton’s momentum has faltered significantly over the past few months. The stock also took a hit. Shares fell about 76% in 2021 after soaring more than 440% the year before.

In November, Peloton lowered its full-year outlook due to ongoing supply chain constraints and slowing demand. Analysts have said they expect the company to have had a weaker holiday as well, which is a possibility prompt a further cut in its full-year forecast.

Last Thursday, Nasdaq said Peloton’s shares would be replaced by Old Dominion Cargo in the Nasdaq 100 Index, effective January 24.

Pfizer, Peloton, Carnival and extra

Paxlovid, a coronavirus disease (COVID-19) pill made by Pfizer, is made in Ascoli, Italy in this undated handout photo by Reuters on November 16, 2021.

Pfizer | Handout | via Reuters

Check out the companies that are making the headlines in midday trading.

Pfizer – Shares rose 1.1% after UK regulators approved the use of Paxlovid, the drug company’s Covid-19 antiviral pill, for people over 18 with mild to moderate illness. The USA Approval from the Food and Drug Administration last week the use of paxlovid in patients aged 12 and over with mild to moderate Covid who are very likely to be hospitalized or not survive.

carnival, Norwegian Cruise Line Cruise ship stocks continued to struggle after the U.S. Centers for Disease Control and Prevention announced Thursday shouldn’t travel on cruisesregardless of vaccination status. Carnival was down 2%, Norwegian Cruise Line was down 1.3% and Royal Caribbean was also down.

Peloton – Peloton stocks fell 3.8% after JMP Securities has downgraded the share’s performance to market value outperform the market. JMP said consumer interest in the home fitness company is waning.

Coterra energy – The oil company fell 2.8% on the last day of 2021. Coterra announced Thursday that Vice President and Chief Technology Officer Kevin William Smith sold nearly 40,000 shares earlier this week.

Novavax The drug maker’s shares fell more than 7% after it was revealed it had renewed manufacturing agreements with Korea-based SK Bioscience. Novavax has also received emergency approval for its Covid-19 vaccines in India.

I have – The Chinese ride-hailing company continued to decline through year-end, down 4.7% on Friday. Didi went public in June, but the stock has since fallen as Chinese regulators took action against the company.

– CNBC’s Jesse Pound and Yun Li contributed to the coverage

Exxon Mobil, Pfizer, Peloton and others

Before the doorbell rings, check out the companies that are making the headlines:

Exxon Mobil (XOM) – The energy giant has signaled that it will post a quarterly profit for the fourth straight year, largely thanks to stronger oil and gas prices. The snapshot of the fourth quarter results was released in an SEC filing prior to the official February 1 results.

modern micro devices (AMD) – The chipmaker said it now expects to complete a $ 35 billion acquisition of all shares for the rival Xilinx (XLNX) during the first quarter of 2022, shifted from its previous year-end 2021 target. Companies said they have not yet received all of the required permits. Xilinx lost 2.2% in the premarket.

Pfizer (PFE) – UK regulators have approved the use of Paxlovid – the drug company’s Covid-19 antiviral pill – for people over 18 with mild to moderate illness.

Peloton (PTON) – The fitness equipment maker lost 1.3% in pre-listing operations after JMP Securities downgraded its stock from “Market Above Average” to “Market Performance”. JMP reports declining website visits and page views.

Colfax (CFX) – The medical technology company is planning a meeting of shareholders to approve a reverse stock split, with the exact ratio to be determined at a later date. Colfax lost 2.7% in pre-trading.

MP materials (MP) – The rare earth materials maker has submitted a shelf offering of up to $ 2 billion in debt securities. The MP share lost 1.1% before the trading session.

Lexicon Medicines (LXRX) – The drugmaker’s shares rose 6.5% in pre-trading hours after filing a new drug application with the FDA for its heart drug sotagliflozin, which is believed to reduce the risk of heart failure in diabetics.

Peloton removes viral Chris Noth advert after sexual assault allegations

Chris Noth appears in a peloton ad after his character was killed while restarting Sex in the City after using a peloton.

Source: YouTube

Peloton removed a viral ad starring Chris Noth from their social media accounts after allegations of sexual assault against the “Sex and the City” actor surfaced Thursday.

“Every single sexual assault allegation must be taken seriously,” Peloton said in a statement. “We were unaware of these allegations when we introduced Chris Noth in our response to HBO’s restart on the show. “In order to learn more about it, we stopped promoting this video and archived related social posts.”

The allegations of sexual misconduct appeared in an article in Thursday The Hollywood Reporter. The article said two women who contacted the publication months apart and did not know each other told The Hollywood Reporter that promotions and press reports for the new sequel to “Sex and the City” are painful memories of the incidents woke up. One is said to have taken place in Los Angeles in 2004 and the other is said to have taken place in New York in 2015.

Because The Hollywood Reporter gave pseudonyms to women to protect their privacy, CNBC was unable to contact them for comment.

Noth denied attacking the two women and said the “encounters were amicable”.

“It is difficult not to question the timing of these stories being published,” he said in a statement. “I’m not sure why they’re showing up now, but I do know one thing: I didn’t attack these women.”

The premiere episode of HBO max “And Just Like That” brought back the spotlight on Noth’s beloved character, Mr. Big. Big was portrayed on the spin-off “Sex and the City” when he died of a heart attack after attending a 45-minute peloton class.

After the episode aired, Peloton’s stock fell, causing the bike maker to make a statement that its fitness equipment can improve people’s physical health. The brand then worked with actor Ryan Reynolds’ marketing firm Maximum Effort to produce a spoof commercial. At that point, Noth wakes up as Mr. Big and says peloton instructor Jess King, “I feel great. Shall we take another ride? Life is too short to not do it.”

Peloton said it had created the spot in just 48 hours in a studio in New York City after responding to the show. The posting of the ad was initially positive for the company and shares of Peloton stock rebounded. Peloton shares were trading nearly 4% on Thursday. After several volatile prices in the past few days, the company’s stock has fallen nearly 74% year-to-date, equating to a market value of $ 13.05 billion.

Peloton declined to comment on how much it spent to attract Noth and Reynolds to help produce the ad. However, on Thursday, Reynolds also removed the ad from his social media.

“The allegations against me from people I met years or even decades ago are categorically false,” Noth said in his statement. “These stories could be 30 years or 30 days ago – no always means no – that is a limit that I have not crossed.”

Peloton fires again at portrayal in ‘Intercourse and the Metropolis’ with parody advert

Brody Longo trains on his Peloton exercise bike in Brick, New Jersey on April 16, 2021.

Michael Loccisano | Getty Images

Peloton wants users to know that their home fitness equipment can improve physical health – rather than create health complications, which was implied when we restarted Sex and the City on HBO max.

The company posted a response to a plot in “Sex and the City,” on its Twitter account on Sunday sent shares in the company into a tailspin last week, piled on a recent sell-off. The stock is down about 75% since the start of the year, hitting a 52-week low of $ 37.67 on Friday.

(The next part of this story contains a spoiler for the first episode of “And just like that …”.)

In the widespread “Sex and the City” scene, one of the main characters in “And Just Like That …”, Mr. Big, died of a heart attack after attending a 45-minute peloton class.

In Peloton’s spoof commercial, Jess King – the Peloton instructor portrayed on the HBO show – sits down with Mr. Big, played by Sex and the City actor Chris Noth, after getting up from a fall and asks him if he would like to take another class on the bike.

“I feel great,” said Noth in Peloton’s video. “Shall we take another ride? Life is too short to not do it.”

Then, in a voice-over from actor and director Ryan Reynolds, it was said, “This is how the world has been reminded that regular cycling stimulates and improves your heart, lungs and circulation. … Cycling strengthens your heart muscles, lowers your resting heart rate and reduces the blood flow and fat values. Experienced.”

The whole thing came together in less than 48 hours and was filmed in New York City, according to a peloton spokesman.

Reynolds also shared the video online on Sunday in a tweet with the words: “Unspoiler alert.”

Peloton Chief Executive Officer John Foley also tweeted on Sunday, “He’s alive.”

The “Sex and the City” scene comes after Peloton cut out in the past few weeks his annual forecast and frozen attitude, amid declining demand for its products. Peloton faces increased competition from other home fitness companies as well as gym chains that are attracting back previous users.

Peloton was a big beneficiary of the pandemic as people got stuck at home looking for ways to maintain healthy habits. The stock also benefited, rising more than 440% in 2020.

However, investors now fear that future growth will be much harder to come by and that it will cost more.

Peloton has faced other issues over the past few months, including regulatory scrutiny. The enterprise announced a voluntary recall of its treadmills in May, after reports of one death and dozens of injuries. It also reduced the price of his original bike by hundreds of dollars, in the hope of reaching more people with a discount.

While Peloton said it coordinated with HBO in placing one of its bikes on “And Just Like That …”, the network said the network did not announce the plot in advance for “confidentiality reasons”.

An HBO spokesperson did not immediately respond to CNBC’s request for comment.

BMO Capital Markets analyst Simeon Siegel, who issued a note to clients last week saying the “Sex and the City” portrayal could indicate potential problems with the brand, said it was a wise move Hire Reynolds to help with a video response. (Reynolds previously snapped the actress in the infamous “Peloton Wife” commercial starring in an ad for his Aviation Gin brand.)

“One who doesn’t love Reynolds,” said Siegel. “It’s better to have Ryan on the Peloton than against.”

However, Siegel said he wondered how much the company spent to bring production together so quickly.

“In any case, it is worth understanding how much a Reynolds-Chris Noth deal costs,” he said.

Peloton buyers face new actuality as bike maker’s prices damage income

Jen Van Santvoord rides her Peloton exercise bike home on April 7, 2020 in San Anselmo, California.

Ezra Shaw | Getty Images

Peloton Investors threatened a rude awakening on Thursday.

Many expected the connected fitness equipment maker to report a decline in sales. Gyms reopened, and outdoor runs and vacations were popular in the summer months. What investors weren’t expecting was a 20% price cut into the company’s top-selling product and an increase in marketing spend.

The growth is slowing down and it is less profitable.

About $ 2.9 billion of Peloton’s market cap was cut off on Friday, the day after the company’s price announcement and report an unexpectedly high loss in the fourth fiscal quarter.

For most of 2020, the company rode a wave of home-based consumers willing to spend thousands of dollars burning calories when gyms closed due to the pandemic. Such an increase in demand led to problems in the supply chain, Forcing peloton to spend more money Expedite deliveries. Nonetheless, the growth came about a lot easier than anyone could have imagined. Pelotons Quarterly sales rose to more than $ 1 billion for the first time when the year ended.

Two years ago, Peloton had 511,000 affiliated fitness subscribers. Now the company has 2.33 million. These are people who are spending $ 39 a month to access Peloton’s digital workout content in addition to owning one of the company’s home fitness equipment.

The supply went with me too. Peloton was one of the biggest winners of the Nasdaq 100 last year, with stocks rising 434% in 2020. However, this year the stock has fallen nearly 30% so far, closing at $ 104.34 on Friday as investors stare at a new reality.

Wall Street has mixed opinions about where the stock could go next. According to FactSet, the analysts’ average target price is $ 133.40. That’s solid above its 52-week low of $ 68.06 last August. But a good deal below its all-time high of $ 171.09 in January.

However, many agree that Peloton’s path to profitability is changing.

“If you had told me yesterday that Peloton would hit 1.3 million net networked fitness additions in fiscal 2022, I would have said the stock would rise 10%,” JP Morgan analyst Doug Anmuth said in a press release to customers. “But the composition of how Peloton gets there is different than expected. The reduction [in the Bike price] is bigger and earlier than expected. “

Anmuth has a target price of $ 138 on Peloton stock. He continues to anticipate international expansion and future product launches, including a purported rowing machine, will fuel growth.

However, Peloton is forecasting an adjusted loss of $ 325 million before interest, taxes, depreciation and amortization for fiscal 2022, which has just begun. The company does not expect to be profitable again until 2023.

In the final quarter that ended June 30, total gross margin fell from nearly 48% in the year-ago quarter to 27% as the costs associated with a treadmill recall and additional shipping costs weighed on profits.

“In the last year and a half [Peloton] Didn’t really have to pull levers, “Wedbush analyst James Hardiman said in an interview with CNBC’s Tech Check on Friday.” And now they have to play so they can continue this growth story. “Their cards are just right, so that current rating sticks. “

Higher marketing spend

Not only is Peloton lowering the price of its bike, it will also significantly increase marketing spending in the coming months. It faces tougher competition in the connected fitness space from Hydrow, Tonal, and Lululemon-own mirror.

Peloton hasn’t revealed exactly how much it plans to spend, but sales and marketing expenses rose 172% year over year in the most recent quarter.

In a phone interview with CNBC, Peloton President William Lynch said the company plans to use a series of paid media advertisements to specifically draw attention to its tread. The cheaper version of the two treadmill machines from Peloton is Start next week in the US, after a month-long delay due to a recall.

“We believe it will allow us to grow faster and it will counter the drop in bike prices,” said Lynch.

Peloton previously stated that it sees opportunities to reach around 15 million households worldwide and sell 20 million devices, compared to 2.33 million it has sold to date.

According to Simeon Siegel, an analyst for BMO Capital Markets, Peloton’s stock has essentially risen as if the company had already met those budget and equipment goals. Peloton is still a long way from that. And lowering the price of bicycles might not be enough of a catalyst to get it there, he said.

Siegel has the lowest price target among Wall Street analysts for Peloton stocks at $ 45, according to FactSet. That would mean Peloton’s value is more than half its current retail value.

“Lowering the cost of the bike can attract new customers, but it shouldn’t extend its lifespan,” said Siegel. “And if anything, one can hypothesize that the lower the acquisition costs, the lower the migration barrier [or drop the service]. “

“If the competition stays high, which we think will be, we will take care of the marketing [costs] will continue to grow and not the other way around, “added Siegel.

Reach a new audience

Management said that Peloton is cutting prices on the cheapest product in order to reach more customers who might otherwise not be able to afford the company’s devices. The company also said that it has built enough manufacturing capacity in recent months to afford the price cut as it achieves greater production efficiency.

When asked by analysts, Chief Executive John Foley commented on a conference call on the results that Peloton is on the offensive – not the defensive.

“When we think about the competitive landscape, we think about democratizing access to great fitness, which has always been in our playbook,” he said.

Foley also said that Peloton believes that one day their treadmill business will be two to three times the size of their bicycle business today. The company does not currently break any revenue from bikes versus treadmills.

Peloton’s growth in the treadmill category was paused after the company recalled from his Tread and Tread + machines due to reported injuries and the death of a child. In particular, the company is facing several related lawsuits. And on Friday It revealed that the US Department of Justice and the Department of Homeland Security had subpoenaed Peloton for more information on this.

With Peloton resuming sales of the Tread – the cheaper of the two machines – analysts should be able to gain more insight into consumer reaction. (It’s unclear when Tread + sales will resume.)

Bank of America has upgraded the fitness company’s stock on Friday, buying from neutral, raising its target price by $ 3 to $ 138 per share. The Wall Street company said it would be most optimistic if Peloton had an opportunity to grow its treadmill sales in the years to come.

“Peloton indicated that Tread’s leads were ‘incredibly strong’ and we trust that enthusiasm at the launch is not unfounded,” said analyst Justin Post in a research note. “We think in six months [subscription] Adds will be more important to the stock than margins. “

—CNBCs Michael Bloom and Crystal Mercedes contributed to this report.

In Peloton competitors with gyms, health app Strava might win

More than 400 hardware devices can connect to Strava, including fitness and fitness equipment, smartwatches and bike computers, and the company claims it uploaded more than 1.1 billion activities to its platform in the past year.

diet

When this year’s Tour de France left the city of Brest on June 26th, most of the 184 professional cyclists were registered with Strava.

So do millions of recreational athletes all over the world, from runners in Rio to swimmers in Switzerland to mountaineers in Montana. Legions of Strava users were also inside Peloton Ergometers and treadmills, Zwift “smart” trainers and NordicTrack rowing machines.

The Strava mobile fitness app tracks more than 30 different activities in real time and loads speed, distance, cadence and other performance data onto a platform on which 86 million users analyze their own workouts, share and compare them with other users and send them to friendly people Challenges can take part with friends and strangers. Its popularity soared amid the pandemic when gyms closed and home and outdoor workouts boomed.

“We have seen tremendous growth in our community,” said Michael Horvath, Strava chief executive officer. “There were months in 2020 when we had three million new registrants and we are now at around two million per month, double what it was before Covid. This means that Strava motivates people, helps them get through this time and gives them the opportunity to get in touch with other people. “

From the Harvard Row team to a $ 1.5 billion startup valuation

Strava, a privately held company, was founded in 2009 in San Francisco by Horvath and Mark Gainey, former Harvard rowing teammates who now serve as CEO and Executive Chairman respectively. The company has approximately 270 employees and additional offices in Denver, Bristol, England, and Dublin, Ireland – the overseas locations as more than 80% of Strava users are outside of the United States

More than 95% of these 86 million users access Strava for free; the rest pays a monthly subscription fee of $ 5 for additional features. While Strava is not reporting any revenue, analytics firm Sensor Tower estimates it generated $ 72 million last year, up from $ 60 million in 2019, ostensibly from data sales, partner rights, challenges, and subscriptions sponsor.

Strava raised $ 110 million in a Series F round last fall, led by TCV and Sequoia, on new funding valued at more than $ 1.5 billion. The founders said it wasn’t a profitable company yet.

Connection with all types of workouts

More than 400 hardware devices can be connected to Strava, including home fitness and fitness equipment, smartwatches and bike computers. The company said it uploaded more than 1.1 billion activities to its platform in the past year, up 33% from 2019. This is in line with the surge in fitness hardware sales from companies like Peloton.

“Covid has shown the importance of physical activity to people’s lives,” said Tom Cove, president and CEO of the Sports and Fitness Industry Association in Washington, DC, which represents manufacturers and retailers.

At the last count, Horvath said “nearly 50 million peloton activities have been uploaded to Strava,” acknowledging the synergy of his partnerships with equipment manufacturers. “As the hub of the networked fitness landscape, we offer athletes a place where they can keep in touch with their community after training.”

The continued success of fitness products seems a good harbinger for Strava.

Health and fitness equipment sales more than doubled to $ 2.3 billion from March to October last year, according to retail research firm NPD Group. Stationary bike sales almost tripled, while treadmill sales increased 135%. “For the first three months of this year, retail sales were up 30% over the same period last year,” said Matt Powell, vice president and senior industry advisor, NPD. However, sales in March remained unchanged compared to the same month last year, which he proxy for the rest of the year 2021.

Peloton in particular has grown accordingly. Revenue for fiscal 2020, which ended June 30, rose nearly 100% year-over-year to $ 1.8 billion, and revenue from management projects is set to grow up to $ 4 billion in fiscal 2021 – itself under consideration of Peloton expects a $ 165 million loss for its treadmill recall. As of March 31, the New York-based company reported more than 54 million members, each with a monthly subscription fee of either $ 12.99 for digital access to live and on-demand courses or $ 39 for an expanded suite of features will pay between $ 1,895 and $ 2,345 for a Peloton bike or up to $ 4,295 for their treadmill, which is currently not available in the US as a company is working on a solution to the security problems.

Softening of the peloton demand

That demand could fade as personal workouts and gyms reopen. Wedbush Securities downgraded Peloton last week, claiming the company had seen a decline in customer loyalty based on analysis of trends in social media and internet search.

“PTON is now entering the next stage in its growth story, which in a post-pandemic era requires the company to generate its own momentum through clever marketing and compelling new products,” the Wedbush analysts write in their note.

Peloton declined to comment on this article.

The connectivity to Strava has helped Zwift, an online game-like cycling platform that allows subscribers who pay $ 14.99 a month to create animated avatars of themselves that ride from inside the virtual world. Typically, a real cyclist attaches the back end of his racing bike to a digitally controlled smart trainer that is connected to an app that simulates his avatar driving an actual route – from a local favorite to a mountain stage in the tour – seen on one Monitor, tablet or smartphone. The trainer automatically increases and decreases resistance to mimic the altitude of the route. About 75% of the Zwifters upload their driving data to Strava and integrate them into the functions.

My theory is that if you are spending a few thousand dollars buying a piece of equipment for your home, it is very unlikely that you will pay $ 50 a month to go to the gym and exercise on the same piece of equipment.

Matt Powell, Vice President and Senior Industry Advisor for NPD

Since Zwift was founded in Long Beach, California in 2014, 3.5 million accounts have been created. The company didn’t release the current number, but said the number doubled in FY2021, which ended in March. Strava said it uploaded 100 million Zwift activities to its platform, including thousands of grueling “Everstings,” a single virtual ride that climbed at least 29,029 feet in total, the height of the mountain. Everest. During the worldwide Covid bans last year, Zwift held a virtual Tour de France with classifications for men and women.

“Zwift is a platform for people to hunt down any carrot they’re looking for,” said Co-Founder and CEO Eric Min. “Our goal is to motivate people to do more.”

While subscriptions “really are where the value lies to us as a company,” Min said, the company is developing its own smart trainers and indoor bikes that are likely to hit the market next year. Zwift won’t be ruling out its existing hardware partners including Wahoo, Elite and Tacx, “but we think we should be the ones who set the bar,” said Min.

Future of Home Fitness When Gyms Reopen

As Covid restrictions continue to relax, people are returning to the gym. In May, gym traffic across the country was back to 83% of January 2020 levels and only 6% lower than the same period in 2019. according to the research results by Jeffries.

But does that mean Zwifters, peloton enthusiasts, and other exercise bikes are losing their mojo and using their equipment as coat hangers? “My theory is that if you are spending a few thousand dollars buying a piece of equipment for your home, it’s very unlikely that you would pay $ 50 a month to go to the gym and work out on the same piece of equipment,” said Powell.

The challenge for the home fitness industry then is to retain its millions of new customers. The key, Powell said, is keeping users connected to the other exerciser’s communities and “improving the experience so people will want to keep using it”.

This is music to Strava’s ears because no matter where people train, the data can be uploaded to their platform.

Despite Strava’s success, the fitness tracking app marketplace remains highly competitive. MyFitnessPal, which was sold by Under armor to the private equity firm Francisco Partners for $ 345 million in October 2020, which had more than 200 million users at the time of the transaction. Under Armor also owns MapMyRun and MapMyRide, which record running and cycling, respectively, while shoe brand Asics owns RunKeeper. Apple and Google have their own health tracking apps that include some physical fitness activities like walking and cycling that are more geared towards casual athletes.

“It’s pretty simple,” said Horvath of Strava’s loyalty strategy. “We are 100% focused on making Strava essential for athletes everywhere. If we do this well, it will fuel our community growth. “

“We believe there are 700 million people in the world who want to wake up and be active every day. We haven’t met them all yet, but we’re trying, ”he said.